Board of Directors
Because assembling the associations’ entire membership is difficult, the power for running organizations is usually vested in groups of individual members called directors. The full membership votes to select directors and to sanctify past decisions. Even though most organizations give a great amount of authority to the board for policy and operation decisions, it is generally true that the members may override board actions, have the right to give directions to the board, and can vote to replace individual directors.The major functions of the Board of Directors include:
- Establishing and maintaining the legal entity and bylaws of the organization
- Making contracts on behalf of the organization
- Acting as trustee of members’ interests by ensuring assets are secure and the quality of service, programs, activities, prestige, and good will of the organization are preserved
- Ensuring the purposes, objectives, goals, and policies are current and followed
- Evaluating major facilities and resources
- Providing operating requirements for qualified management
- Generating member and community support
- Assuring that productive board and committee meetings are held while preventing unauthorized actions
- Reviewing reports, staff performance, and standards
- Providing reports to the organization’s members.
It is important to remember that the board of directors should stay focused on the big picture and stewarding the organization into the future. Typically boards with an unclear role begin to focus on minor details and are not structured to govern. The result is a body that operates in a reactive rather than proactive manner, leading to inefficiency.
Advice for a new Board Chairperson
You’re stepping into your organization’s highest volunteer position. You’ve probably seen it all and done it all in your association—in fact, if you didn’t have a history of effective volunteering you wouldn’t have risen to the top spot. To help you be equally skillful in your new role as chief elected officer, use this list of relevant advice, most of which comes from other volunteer leaders:
- Realize that you and the chief staff officer are on the same side and forge an understanding about your respective responsibilities
- Know the obligations and expectations of the association you lead
- Get to know the rest of the staff, too.
- Don’t forget, cooperation cuts both ways.
- Get thoroughly acquainted with finances.
- Keep your eyes on the most pressing issues.
- Recognize that strategic planning is not an event.
- Understand your association’s culture.
- Learn big-picture facts about membership.
- Never forget that members, constituents, and customers are not “just like” board members.
- Keep an eye on the competition of today and tomorrow.
- Brush up on the association’s positions on issues relevant to its mission.
- Be sure to get the most from meetings.
- Give feedback in the most appropriate way.
Most directors are not accountants and have little formal accounting or financial management training. In this situation, board members have a responsibility to (1) educate themselves in the basics of financial management; (2) be able to recognize when problems exist; (3) know where to go for assistance if it is needed, (4) be prepared to take corrective action; and (5) plan for the future financial growth and strength of the organization.
Financial Duties of the Board
Once directors receive the monthly financial statements, they have two responsibilities:
1. Analyze the revenue and expenses
2. Determine what went right and what went wrong during the reporting period
Questions directors should ask when reviewing financial information include:
- Will the association be able to pay its bills and payroll during the coming month and the coming year?
- Has the money been spent wisely?
- Is the incoming revenue more or less than in previous accounting periods?
- What are the reasons for any variations?
- Are the expenses of the organization properly explained?
- Are the various expenditures in line with the budget?
- What are the reasons for variations?
- Are the variations in the expenses compared to previous accounting periods?
- Are reserves being accumulated for the future?
- Do the CSO and the association’s staff really understand the true financial situation of the organization?
- What are the assumptions that have been made on any projected figures?
- When was the last professional audit of the association’s books?
Questions for self-assessment of the Board of Directors
After you attend your first board meeting and settle down to the business of leading your association, setting policy, and planning for the future, your role in such an important mission can become euphoric. Then reality settles in. Meetings are not as satisfying as you first imagined; the sense of group accomplishment you expected has failed to materialize; and you begin to question the time you are spending. What can be done? Consider these self-assessment questions for a board discussion.
- To what extent are the goals of the board clear to you?
- To what extent is your role on the board clear to you?
- How would you rate the board’s problem-solving abilities?
- To what extent is conflict on the board managed productively?
- How effective are the board’s decision-making processes?
- What is the quality of communication among board members?
- What is the quality of communication from the leadership to members?
- What is the quality of communication from the leadership to committees?
- What is the quality of communication from members to the leadership?
- What is the quality of communication between board and staff?
- If you could change three things about how board members work together, what would they be and why?